APPENDIX: REPORT FROM THE SUB-COMMITTEE
ON LORDS' CONDUCT|
Members' reimbursement scheme: the conduct of Lord
Introduction and summary
1. This report replies to a letter from the Clerk
of the Parliaments dated 5 March 2010 which, following the Report
from the Committee for Privileges on the procedure for considering
complaints against members
("the report on procedure"), invited the Sub-Committee
on Lords' Interests
to help him investigate a complaint about Lord Paul's use of the
members' reimbursement scheme.
2. We find on the facts that the Oxfordshire property
designated by Lord Paul as his main residence for the purpose
of the members' reimbursement scheme from 11 October 2005 to the
end of July 2006 did not meet the criteria endorsed by the House
Committee on 26 January 2009 (p16E);
and that Lord Paul did not make his designation and claims for
night subsistence away from that property and for the mileage
allowance in good faith. We recommend that, despite Lord Paul's
swift repayment of the whole amount wrongly claimed (£41,982),
the House sanction Lord Paul by requiring him to make a personal
statement of apology to the House and thereafter suspending him
from the service of the House for six months.
The allegation, complaint and process of investigation
Allegation and complaint
3. On 11 October 2009, the Sunday Times newspaper
alleged that Lord Paul had designated as his main residence a
flat in which he had never spent the night (p38):
"A multi-millionaire ally of Gordon Brown
pretended that a small flat occupied by one of his employees was
his main home so he could claim £38,000 in expenses from
the Lords. Lord Paul, one of Labour's biggest donors and a friend
of the prime minister, has admitted he never even slept in the
flat, despite stating it was his main residence. The one-bedroom
flat was occupied by a manager from one of Paul's hotels who confirmed
last week that the peer had never lived there while claiming the
expenses. Paul, who has a family fortune of £500m, was actually
based in London, where he has lived for more than 40 years."
4. Mr Angus Robertson MP complained about Lord Paul's
alleged conduct the same day (p39); and Lord Paul referred himself
to the Clerk of the Parliaments for investigation on 12 October
Procedure for investigation of allegations about
5. The House Committee is the principal domestic
committee of the House and is responsible for the members' reimbursement
scheme (p5B). On 20 October 2009, the Committee endorsed a procedure
for dealing with complaints relating to the scheme (p15H). It
involved investigation by the Clerk of the Parliaments as Accounting
Officer; reference to the Sub-Committee in "complex or serious"
cases; report by the Clerk of the Parliaments to the House Committee;
and sanctioning by the Committee for Privileges if appropriate
(p16B). On 6 July 2010, the Clerk of the Parliaments and House
Committee agreed to stand aside in this and two other cases where
this Sub-Committee had been involved: thus this report goes via
the Clerk of the Parliaments to the Committee for Privileges and
Conduct, to whom lies Lord Paul's right of appeal.
Procedure in this investigation
6. After 11 October 2009, Lord Paul met and corresponded
with the Clerk of the Parliaments, correspondence which concluded
with his repaying £41,982 to the House (p41D).The
Metropolitan Police had meanwhile decided to investigate whether
Lord Paul had committed an offence under section 17 of the Theft
Act 1968 or the Fraud Act 2006. The Clerk of the Parliaments suspended
his own investigation into Lord Paul until the criminal process
had concluded. On 3 March 2010 a joint Crown Prosecution Service
/ Metropolitan Police Service panel decided not to prosecute Lord
Paul and the Clerk of the Parliaments resumed his own investigation.
On 5 March 2010, he asked the Sub-Committee "to investigate
and determine the facts of the case" (p41E).
Investigation by the Sub-Committee
7. The report on procedure says that we may not accept
for investigation a complaint going back more than four years:
we may thus examine conduct in this case from 11 October 2005.
We have not limited our investigation to the allegation made by
the Sunday Times newspaper but have instead generally investigated
Lord Paul's use of the members' reimbursement scheme. We have
focused on Lord Paul's claims for night subsistence and travel.
Lord Paul's claims for day subsistence, office costs, and Select
Committee expenses are not at issue.
8. Our investigation was interrupted by the dissolution
of Parliament on 12 April 2010. The new House met on 18 May and
appointed the Committee for Privileges and Conduct on 2 June.
The Committee appointed this Sub-Committee on 7 June. We reported
to the Clerk of the Parliaments on 28 July with the recommendation
that, to retain confidentiality during the summer recess without
affecting the timetable for any appeal, he should forward the
report to the Chairman of the Committee for Privileges and Conduct
only towards the end of the summer recess.
9. The Sub-Committee had as written evidence the
amounts claimed by Lord Paul since April 2003
(p24) and his claim forms since March 2006
(pp29-37); correspondence between the House authorities and Lord
Paul (pp40-4); a letter from the Sunday Times and transcripts
of telephone conversations and interviews on which their article
was based (pp45F-56); and witness statements taken by the Metropolitan
Police Service in the course of their investigation of Lord Paul
(pp58-93). We welcome the constructive approach of the police
in taking the difficult decision to release to us the material
they gathered. The officers of the Sub-Committee corresponded
with Lord Paul. We took oral evidence in private from Lord Paul
(pp94-105), to whom we had earlier disclosed the written evidence.
The report on procedure says:
25. The Code of Conduct states that "in
the investigation and adjudication of complaints against them,
Members of the House have the right to safeguards as rigorous
as those applied in the courts and professional disciplinary bodies."
They may be accompanied to any meeting by a colleague, friend
or legal adviser, but every effort is made to keep proceedings
informal, and there is no expectation that they should be so accompanied.
If they do choose to bring a friend or adviser, they will nevertheless
be expected to answer for themselves (and not through their friend
or adviser) any questions put to them."
10. Lord Paul co-operated fully with the investigation.
He brought with him to the evidence session his secretary, Ms
11. We recommend that all of this evidence be
published, subject only to giving the police sufficient time to
allow them to inform those from whom they took statements.
12. The report on procedure says:
26. When its investigation is concluded, the
Sub-Committee assesses the evidence. In order to find against
a Member, the Sub-Committee requires at least that the allegation
is proved on the balance of probabilities.
27. If the investigation has uncovered material
evidence that is at variance with the Member's version of events,
this will be put to the Member, who will have a chance to challenge
it. Before reaching its conclusions, the Sub-Committee will also
share with the Member a draft of those parts of its report dealing
with issues of fact, so that the Member has an opportunity to
comment on them.
28. If there remain significant contested issues
of fact, the Sub-Committee will agree its own account of the facts
of the case, while drawing to the attention of the Committee for
Privileges and the House any challenge to this account made by
the Member concerned."
13. To fulfil these paragraphs, we showed Lord Paul
a draft of our account of the facts set out in paragraphs 14 to
37 below. He accepted the account of the facts but made a further
point to which we draw attention (p106).
14. The facts of the case are as follows.
The members' reimbursement scheme
15. The members' reimbursement scheme is founded
on resolutions of the House and is explained in a General Guide
published by the Finance Department and in a Quick Guide
set out on the reverse of the claim form. The Clerk of the Parliaments
is responsible for administering the scheme, subject to direction
by the House Committee on points of difficulty or doubt (p5B).
The relevant resolutions and guidance are set out in full at pp1-15
of the printed evidence but we must here quote some relevant passages.
The resolutions of the House and published guidance
16. The principal resolution of the House in relation
to day and night subsistence is that of 25 July 1991 (p1D). It
"(1) Members of this
House, except any Lord who receives a salary under the Ministerial
and other Salaries Act 1975 and the Chairman and Principal Deputy
Chairman of Committees, shall be entitled to recover (in addition
to the costs of travel for which other provision is made) expenses
certified by them as
(a) expenses incurred (otherwise
than as mentioned in sub-paragraph (b) below) for the purpose
of attendance at sittings of this House or of Committees of this
(b) expenses incurred in
staying overnight away from their only or main residence where
it is necessary to do so for that purpose."
17. The principle that a member may claim a separate
allowance towards the recovery of the cost of travel by car for
the purpose of parliamentary duties was established by a resolution
of the House of 17 May 1961 (p1A). The current resolution relating
to travel by car is that of 10 November 2004 (p2C). It reads:
"That this House approves
the following proposals with respect to payments of car, bicycle
and motorcycle allowances to Lords for journeys which they have
commenced on or after 10 November 2004
(1) The maximum allowance
payable in respect of a journey by car, motorcycle or bicycle
should be payable at the rate which is applicable to that kind
of vehicle under subsection (2) of section 230 of the Income Tax
(Earnings and Pensions) Act 2003, as amended from time to time.
(2) For the purposes of paragraph
(1), the reference in that subsection to "the first 10,000
miles" is to the total number of miles of travel by car by
the Lord claiming the allowance, which is either
(a) undertaken for the purpose
of attending this House for the purposes of his parliamentary
(b) undertaken while on parliamentary
duties within the United Kingdom."
18. It is clear from the resolutions that the
purpose of the scheme is the recovery of expenses necessarily
incurred in attending the House.
19. As to the guidance, the 2005 edition of the General
Guide read (pp2-14):
"1.2.1 Members of the
House of Lords do not, in general, receive a salary in respect
of their parliamentary duties. However, Members may be reimbursed
actual expenses arising out of these duties, in accordance with
the rules of the Members' Reimbursement Allowance Scheme. The
Members' Reimbursement Allowance Scheme is governed by Resolutions
of the House. Rules for the recovery of Members' expenses are
administered by the Clerk of the Parliaments who also has limited
discretion to deal with matters that arise on claims. Points of
particular difficulty or doubt may be referred to the House Committee,
which supervises the arrangements for the reimbursement of expenses
1.3.1 All amounts paid in
settlement of claims as detailed in this guide represent reimbursement
of actual expenses arising out of unpaid parliamentary duty, rather
than income from employment. Consequently, they are not subject
to income tax, and need not be included on a tax return ...
4 ATTENDANCE AT SITTINGS
4.1 General - Expenses
Related to Attendance
4.1.1 The basic principle
underlying the scheme is that the entitlement to recover expenses
arises only in respect of attendance at sittings of the House
or its committees at Westminster
4.1.3 Members who wish to
claim attendance expenses must complete and sign the attendance
expenses claim form and forward it as soon as convenient after
the end of each month, or period of claim, to the Members' Expenses
Section. A Member's signature effectively certifies that the amount
claimed has been spent for the purposes of parliamentary duties
as set out above. Receipts are not required ...
4.2.1 Claims may be made
only for journeys over five miles between a Member's main place
of residence in the United Kingdom and Westminster. Claims for
incidental travel costs (e.g. those arising from short distance
journeys within a five mile radius of Westminster, tolls and car
parking charges) are covered by the day subsistence allowance
4.2.2 Members seeking to
receive travel costs must register their main place of residence
with the Members' Expenses Section. Members with more than one
main place of residence may register an alternative main residence
with the Members' Expenses Section for the purpose of claiming
travelling expenses. Registration is subject to the approval of
the Clerk of the Parliaments ...
4.2.4 Members may recover
the cost of fares incurred by them for travel by any public railway,
sea, and air or bus service, or the costs of journey made by private
4.2.8 Claims in respect of
journeys by private car are payable at:
· 40p per mile up to 10,000 miles in the
year ending 31 March; and
· 25p per mile for mileage in excess of
10,000 miles in the same year.
No other claims in respect
of motoring expenses are reimbursable under the travelling expenses
heading. Incidental travel costs such as tolls, congestion charges
and car-parking charges can be claimed against the daily limit
of the day subsistence allowance (4.5).
4.4.1 Members whose main
residence is outside Greater London may claim for expenses of
overnight accommodation in London while away from their only or
main residence. The maximum daily limit is £154.50.
4.4.2 A Member whose main
residence is outside Greater London and who maintains a residence
in London for the purpose of attending sittings of the House may
claim this allowance towards the cost of maintaining such a residence.
4.4.3 Claims for night subsistence
are only permissible in respect of nights actually spent in London
either immediately preceding or following attendance at a sitting
or meeting described in paragraph 4.1.1 above. For example, a
Member who necessarily travels to London on a Sunday and attends
sittings of the House on Monday, Tuesday, Wednesday and Thursday
and then returns home on Friday or later may claim night subsistence
for a maximum of 5 nights at up to a maximum of £154.50 per
night (i.e. a maximum of £772.50 for the week). However,
if the Member returned home on the Thursday evening, the maximum
claim for night subsistence would be 4 nights at up to a maximum
of £154.50 per night (i.e. a maximum of £618 for the
4.4.4 Members who choose
to travel home each night or whose main residence is within Greater
London cannot claim the night subsistence allowance."
20. The General Guide was updated in January
2007, October 2008 and April 2009. The language used to describe
the scheme was materially the same in each edition until 2009,
which left out the word "allowance" in several places,
including in the title of the guide
and in paragraph 4.4.2 in relation to night subsistence.
21. The claim form used until October 2008 read (p29):
"I certify that during
the month of ............ I have attended a sitting of the House
or of a Committee of the House on the under-mentioned dates and
claim reimbursement of:
(a) Night subsistence
incurred in such attendance or in respect of the maintenance of
a London residence (other than a main residence) used for the
purpose of attending the House (see note (i)) ...
(d) Travelling Expenses
(please ensure all travel dates are entered) (see note (v))"
Thereafter paragraph (d) read (p35F):
"(d) Travelling Expenses
see note (v)"
22. At the bottom of the form, the claimant has to
print his name, sign, date the claim and enter his main place
23. Notes (i) and (v) refer to the Quick Guide
printed on the reverse of the claim form which in 2005 read
"(i) Night Subsistence
- Members whose main residence is outside Greater London may claim
expenses, within a daily limit of £154.50 (from 1 August
2005 to 31 July 2006), for nights spent away from their only or
main residence for the purpose of attending sittings of the House
a) where they have incurred expenses of overnight accommodation
in London or; b) as a contribution towards the costs of maintaining
a London residence in connection with their parliamentary duties.
Claims can only be made in respect of days of attendance ...
(v) Travelling Expenses
- These may be claimed for journeys between main place of residence
in the United Kingdom and London by any public railway, sea, air
or bus service. Claims in respect of journeys by private car are
restricted to an allowance of 40p per mile up to 10,000 miles
then 25p thereafter. Claims in respect of journeys undertaken
by motorcycle are paid at the rate of 24p per mile and by bicycle
at the rate of 20p per mile."
24. The rates changed over the period. In August
2006 paragraph (v) read:
Expenses - Claims may be made only for journeys over five
miles between a Member's main place of residence in the United
Kingdom and Westminster by any public railway, sea, air or bus
service. Claims in respect of journeys by private car are restricted
to an allowance of 40p per mile up to 10,000 miles then 25p thereafter.
Claims in respect of journeys undertaken by motorcycle are paid
at the rate or 24p per mile and by bicycle at the rate of 20p
per mile. Claims for incidental travel costs are covered by the
day subsistence allowance (see section (ii))."
25. In August 2009 paragraph (i) had a sentence added
to the end: "When claiming Night Subsistence dates of travel
must be shown on the claim form." As did paragraph (v): "Members
are required to provide receipts or vouchers when submitting claims
for ticketed travel in excess of £50 per return journey (£25
per single journey)."
26. Although the Quick Guide says "Members
are encouraged to contact the Finance Department, House of Lords
for general assistance, or to discuss any particular points that
arise from their claims", in practice the onus on interpreting
the scheme has fallen on the individual member. Save for the Lord
President (Lord Soames) speaking of the member's "usual residence"
when moving the motion which first set up the night subsistence
regime in 1979, there was no guidance on the meaning of "main
residence" other than the two words themselves until March
Lord Paul's designated main residences
27. Lord Paul successively designated two main residences
in the period from 11 October 2005 to the end of the last Parliament
on 12 April 2010. Until the end of July 2006, it was The Cottage,
Bignell Park Hotel, Chesterton, Oxfordshire. Since October 2006
it has been The Grange, Beaconsfield, Buckinghamshire.
Facts relating to the Oxfordshire property
28. Lord Paul's company, Caparo Holdings, bought
the Bignell Park Hotel, Chesterton, Oxfordshire in July 2001 (p40J).
In January 2005, Lord Paul designated The Cottage, Bignell Park
Hotel as his main residence (p40L). We may examine conduct back
to 11 October 2005, four years before the complaint of 11 October
29. The House of Lords Finance Department has retained
the amounts claimed each month by members under each head since
2003 but has retained claim forms only from March 2006; members'
earlier claim forms have been disposed of in accordance with the
department's disposal policy. Lord Paul's claims for the short
period March to July 2006 show claims for night subsistence away
from his designated main residence for every day's attendance
at the House and the mileage allowance for journeys by car from
and to the main residence every weekend when the House was sitting
with the exception of 29-30 April 2006 (p24H). The amounts claimed
indicate a similar pattern of claims since designation of the
Oxfordshire property as his main residence in January 2005 (p24D),
a position confirmed by Lord Paul (Q114). He claimed £39,447
in night subsistence and £2,535 in travel expenses throughout
the period that the Oxfordshire property was his designated main
residence (i.e. January 2005 to July 2006), a total of £41,982.
30. The Oxfordshire property is a one bedroom flat
within the hotel, with a separate entrance (p73D) but without
a separate postal address (p73E). It was occupied throughout the
period by the manager of the hotel (p73J; p47D). Lord Paul was
financially responsible for the hotel in so far as he owns the
company which owns the hotel. The running costs, including utilities,
were subsumed into those of the hotel (QQ111-12).
31. The manager of the hotel recalls Lord Paul visiting
the hotel for board meetings (p47F); the assistant manager recalls
him visiting 6-7 times a year for a day at a time (p73H). Lord
Paul did not confirm how often he visited the hotel (Q76 et seq).
We do not need to find how often Lord Paul visited the Oxfordshire
property because he admits that he never spent a night at the
property (Q35) or at the hotel (p73L; Q35). Nor did he stay overnight
in the area (QQ101-3). This is despite claiming for journeys to
the main residence usually on a Friday or Saturday and a return
journey to London on a Sunday (pp25-8).
32. In relation to the journeys, Lord Paul admits
that he did not make the journeys on the days stated on his claim
forms (QQ36, 90-1; 171-2) though he says that he did travel to
the hotel and/or surrounding area most weekends when the House
was sitting (p44C; QQ37; 98-9). Indeed, he may have made more
journeys than those for which he claimed, but he only claimed
for one return journey a week (Q93).
33. Defending the designation, Lord Paul says that
having bought the hotel in 2001 he wanted first to test whether
he wished to live in the country or remain in London (Q79); then
considered developing part of the hotel as a residence for his
family, making use of the hotel amenities (p40K; QQ80-1; 145).
Having decided in favour of the country but against such a development,
he used the hotel as a base for looking for a country house closer
to London (QQ83-4; 106).
34. He found the desired country house on 28 February
2005, namely The Grange, Beaconsfield, Buckinghamshire. He contracted
to buy the Buckinghamshire property in March 2006; and designated
it as his main residence in August 2006 (p41B). Having contracted
to buy the Buckinghamshire property, he stopped house hunting
but continued to travel to and from that property (not the Oxfordshire
property) each weekend (QQ128-9; 166-7). The Buckinghamshire property
is 30 miles closer to London than the Oxfordshire property. The
Oxfordshire property remained his designated main residence and
subject to claims for night subsistence and travel until August
Facts relating to the Buckinghamshire property
35. In August 2006, Lord Paul designated the Buckinghamshire
property as his main residence and claimed night subsistence away
from that main residence for his attendance at the House from
when it resumed in October. His claim forms show claims for every
day's attendance and the mileage allowance for journeys by car
from and to the main residence every weekend when the House was
sitting with the exception of 4-5 November 2006, 17-18 March 2007
and 2-3 November 2007. The property is a 250 acre estate in Buckinghamshire
36. In correspondence with the Registrar, Lord Paul
says that "I spend a lot of time at the Grange (almost every
weekend) with my wife and family" (p44E). He owns the Buckinghamshire
property personally and no one other than his family uses it.
He says that he spent part of the Easter, Whitsun and summer recesses
of 2007-09 at the property but cannot confirm the exact periods
(p44F). As far as he can recall, he travelled as indicated by
his claim forms and stayed overnight at the property.
Lord Paul's residence in London
37. When in London, Lord Paul lives in a flat in
a block of flats on Portland Place in which he and his wife have
lived since 1966 (Q11); he owns the building (Q15); other members
of his family live in other of the flats (Q14) but about half
of the flats are rented by private tenants (Q21). We have not
asked and he has not volunteered what expense he incurs in maintaining
38. The case raises three issues: 1) whether Lord
Paul's two designated main residences in the period under investigation
meet the criteria endorsed by the House Committee for these investigations;
2) whether Lord Paul correctly claimed for travel from and to
those main residences; and 3) if the facts identify one or more
wrongly designated main residences, whether Lord Paul acted in
good faith in making his designations and claims for night subsistence
Issue 1: whether Lord Paul's designated main
residences in the period under investigation met the criteria
endorsed by the House Committee
39. On 26 January 2010, the House Committee endorsed
the Clerk of the Parliaments' approach to determining allegations
about the members' reimbursement scheme, as recorded in the published
extract of the minutes of that meeting (p16E):
"He [the Clerk of the Parliaments] emphasised
that he was operating under the current scheme, one of the weaknesses
of which was that there was no clear definition of a main residence.
He had however taken the view, within the context of the individual
assessment of each case, that there needed to be a minimum threshold
beyond which it would be inappropriate for a Member to designate
a property as a main or only residence, and consequently claim
overnight subsistence when staying in London.
He sought the endorsement of the Committee of
the criteria which he was incorporating into his assessment of
cases where frequency of visits was an issue: i.e. that the main
residence had to be visited for a minimum of one weekend per month
over the year when the House was sitting and for periods during
recesses. These factors would be taken into account, along with
other evidence, when assessing the validity of the designation
of a main residence. He drew the attention of the Committee to
the fact that it was probable that more stringent requirements
would be a feature of the new scheme for Members' expenses.
He also raised the issue of whether a property
that was occupied by a relative other than a spouse or partner
could in any circumstances be designated as a main residence under
the current scheme. It was felt that this could in very specific
circumstances be appropriate, subject to the thresholds established
and depending on the detail of the Member's connection with the
property, including relevant financial responsibilities."
40. We consider the criteria endorsed by the House
Committee to be binding on us: it is the principal domestic committee
of the House and explicitly responsible for the members' reimbursement
41. "Visit" is used in the context of
"weekend". We consider that "visit" must include
an overnight stay. We also consider that "one weekend per
month" is not a minimum threshold set by the House Committee,
but the minimum frequency of occupation when the House was sitting
subject to "other evidence": it is a necessary but not
42. The Committee for Privileges' and our own report
on Lord Clarke of Hampstead's use of the members' reimbursement
scheme, agreed to by the House on 6 April 2010, is also relevant.
In that report, we found that:
"17. It is clear to us that a member may
only claim under the scheme i) if they have stayed overnight away
from their main residence; and ii) they have attended the House.
There is no ambiguity about these conditions ...
23. Our interpretation of the resolution, General
Guide and Quick Guide taken together is that a member who maintained
a residence in London for the purpose of attending the House could
reasonably claim that the night subsistence provision was a flat
rate allowance intended to reimburse the member for the costs
of maintaining such a residence (General Guide paragraph
4.4.2). A member who did not maintain a residence in London was
however entitled only to claim for the recovery of actual expenses
(General Guide paragraph 4.4.1). The former is no longer
the case as the word "allowance" was removed from the
guidance in April 2009."
43. The report from the Committee for Privileges
was agreed to by the House and is binding.
44. In the period since the House Committee endorsed
the criteria for determining a main residence for the purpose
of these investigations, the Clerk of the Parliaments has determined
a number of complaints raising similar questions (pp17-23) and
a further number of media allegations against members who were
not subsequently complained about.
Opinion of the Sub-Committee
45. The fact that Lord Paul admits that he never
stayed overnight at the Oxfordshire property is sufficient for
us to find that his designation did not meet the criteria endorsed
by the House Committee. Lord Paul wrongly designated the Oxfordshire
property as his main residence.
46. With the assistance of the Finance Department,
Lord Paul calculated that he claimed £39,447 in night subsistence
in respect of nights away from the Oxfordshire property from January
2005 to July 2006. He has voluntarily repaid this sum to the House.
This is a greater sum than the House could have required him to
repay, as we may only investigate the four years of conduct back
to 11 October 2005.
47. The Buckinghamshire property is a home owned
by Lord Paul and regularly used by Lord Paul and his wife when
the House was sitting and in the recess. Lord Paul's designation
meets the criteria endorsed by the House Committee.
48. In terms of the amount of night subsistence claimed
by Lord Paul for his accommodation in London, our report on Lord
Clarke of Hampstead (agreed to by the House on 6 April 2010) made
clear that the scheme provided a flat rate allowance intended
to reimburse the member for the costs of maintaining a residence
in London until April 2009 when the word "allowance"
was removed from the guidance (General Guide paragraph
4.4.2); since then it has been a reimbursement scheme. Lord Paul
legitimately claimed the full amount of available night subsistence
as an allowance when away from the Buckinghamshire property until
6 April 2010. Since that date, Lord Paul should only have claimed
reimbursement of the actual cost of maintaining his London residence.
Lord Paul claimed the full amount of night subsistence in April
2010 but has not yet submitted a claim in the new Parliament.
Issue 2: whether Lord Paul should have claimed
for travel from and to his main residence
49. Lord Paul should not have designated the Oxfordshire
property as his main residence. Claims for travel may only be
made for journeys made between a main residence and Westminster
in respect of parliamentary duties (pp6K; 15B). As the Oxfordshire
property was not his main residence, Lord Paul was not eligible
to claim for travel from and to Oxfordshire. We do not need
to find whether he made the journeys for which he claimed, though
he admits that he did not make them either from or to his designated
main residence or on the dates for which he claimed.
50. Lord Paul calculated that he had claimed £2,535
under the mileage allowance for journeys by car from and to Oxfordshire
from January 2005 to July 2006
and he has voluntarily repaid this sum to the House. Again, this
is a greater sum than the House could have required him to repay,
as we may only investigate the four years of conduct back to 11
51. Lord Paul confirmed that he travelled from and
to the Buckinghamshire property as indicated by his claims for
the mileage allowance for journeys by car (p44F). He was entitled
to make those claims.
Issue 3: if the facts identify one or more
wrongly designated main residences, whether Lord Paul acted in
good faith in making his designation and claims
52. Having found that Lord Paul wrongly designated
the Oxfordshire property as his main residence and that he made
claims for night subsistence and travel to which he was not entitled,
we now turn to the issue of good faith. If Lord Paul did not act
in good faith when making his designation and claims for night
subsistence and travel, then he is liable to sanction. If however
Lord Paul had good reason to believe that his designation and
claims were valid, sanction might be inappropriate.
53. In correspondence with the Clerk of the Parliaments,
Lord Paul says (p41B):
"I recognise that claiming during the Bignall
interlude has been perceived as having been on the wrong side
of the line. I acted on entire good faith throughout."
Understanding of the scheme, designations and
claims for night subsistence
54. In testing Lord Paul's good faith, we are not
assessing his conduct against the criteria endorsed by the House
Committee but against any natural understanding of the scheme
and "main residence" that might be held by a reasonable
person. This is because the criteria endorsed by the House Committee
were not designed retrospectively to define "main residence"
for the purpose of the scheme but were designed only as criteria
to be applied to the retrospective examination of certain members'
55. Lord Paul makes his assertion of good faith on
the basis of his understanding of the rules. In relation to "main
residence", Lord Paul says (p43L):
"At the time there was no definition of
"main" or "principle" [sic] residence
and it was my understanding (which prevailed in the House from
2004 to 2009) that if one owned a second home outside of London
a claim could be made for overnight subsistence in London when
the House was sitting and also for travel to and from the second
home. I accept now, that due to the lack of guidance at the time,
my understanding may have been mistaken."
In Lord Paul's account, it was ownership not residence
that was essential (QQ 61 to 65; 69; 147); indeed there was no
need to reside (Q155). The word "main" in "only
or main residence" had no effect on the definition (Q161).
56. Such a misconception might still be justified
if Lord Paul had studied the guidance and come to such a conclusion,
but he had not. He never read the Quick Guide on the reverse
of the claim form, telling us that he often signed forms without
reading the detail (Q141). He did not consider his obligation
when he himself completed his claim form each month (Q113) and
signed his name above the address he had filled in as his "main
place of residence" (Q153). Nor did he seek anything other
than very general advice from colleagues (QQ70; 107-10; 143).
He did not even read the rules when certain of his claims were
rejected (QQ148-9). We find this attitude to the making of a claim
upon public funds to be inexcusable.
57. Even if Lord Paul's definition of "residence"
were reasonable, his lack of regard to "main" is unreasonable.
We consider that no reasonable person could hold Lord Paul's understanding
of "main residence" in relation to the scheme.
58. We find that Lord Paul's designation of the
Oxfordshire property was a deliberate misrepresentation of his
domestic arrangements made with the intention of enabling Lord
Paul to make use of the night subsistence element of the members'
Claims for the mileage allowance for journeys
59. In relation to travel, Lord Paul suggested that
he was entitled to the mileage allowance for a return journey
from and to his main residence irrespective of whether he had
made the journey (QQ91-3). The wording of the Quick Guide
is clear: "Members of the House of Lords... are entitled
to recover the costs of travel... incurred in connection with
their parliamentary duties... Travelling Expenses - These may
be claimed for journeys between main place of residence in the
United Kingdom and London" (p15B). The members' reimbursement
scheme did not exist to subsidise Lord Paul's weekend house-hunting
(Q106) but to facilitate his attendance in the House if that involved
him being away from his main residence. We consider that no reasonable
person could believe that the scheme enabled a member to claim
for journeys he did not make and for purposes unconnected with
attendance at the House.
60. On the balance of probabilities, we consider
that Lord Paul did not truly hold the understanding of the provision
for the mileage allowance for journeys by car with which he presented
us. Not only could no reasonable person hold such an understanding,
but the fact that he claimed for journeys to the main residence
usually on a Friday or Saturday and a return journey to London
on a Sunday, when he admits that (a) the journeys were not made
on the days stated; and (b) he never stayed overnight in the Oxfordshire
property, the hotel or in the surrounding area, indicates to us
that Lord Paul made the claims for the mileage allowance for
journeys by car from and to the Oxfordshire property with the
intention of adding verisimilitude to his designation of that
property as his main residence.
61. We find that Lord Paul did not act in good
faith in designating the Oxfordshire property as his main residence
and in claiming night subsistence and travel expenses from and
to that property.
62. We are conscious that this case is similar to
that of Lord Clarke of Hampstead (in which an apology was sufficient)
in that both members deliberately made false claims over a sustained
period of time; referred their own conduct for investigation;
quickly repaid the wrongly-claimed money; cooperated with the
investigation; and apologised. Lord Paul's case is however different
from that of Lord Clarke. Lord Clarke wrongly claimed for 61 days'
night subsistence when he had in fact returned to his main residence,
but his (only) residence was genuinely in Hertfordshire. Lord
Paul's wrong is greater in scale: he did not have a main residence
outside London; none of his claims for night subsistence away
from that residence was valid; he did not make the journeys for
which he claimed on the days claimed; and the quantum wrongly
claimed is greater. In addition, despite his apology to the Sub-Committee,
Lord Paul has continued to present his case as a reasonable interpretation
of the scheme honestly held. It was not. Not only did he make
false claims but he presented the Sub-Committee with an understanding
of the scheme which no reasonable person could hold in an attempt
to disguise the deliberate nature of his deception.
63. We recommend that the House sanction Lord
Paul by requiring him to make a personal statement of apology
to the House and thereafter suspending him from the service of
the House for six months. His apology must be unconditional, and
agreed in advance with the Chairman of the Sub-Committee, to be
5 The Code of Conduct: procedure for considering
complaints against Members, 4th Report from the Committee
for Privileges, session 2007-08, HL Paper 205, paragraph 11 bullet
2. Report agreed to by the House on 18 December 2008. Hereafter
referred to as "the report on procedure". Back
In the last Parliament, the Sub-Committee was styled the Sub-Committee
on Lords' Interests; it is now styled the Sub-Committee on Lords'
The references in this report to the printed evidence are in
the form "p16E" and "Q114". The former refers
to page 16 of the printed evidence at letter E; the latter to
question number 114 in the transcript of oral evidence. Back
Report on procedure, paragraph 11 bullet 2: "Matters relating
to the Members' Reimbursement Allowance Scheme are the responsibility
of the Clerk of the Parliaments, as Accounting Officer for the
House of Lords. In exceptional circumstances he may request the
Sub-Committee to assist him in investigating a complex or serious
House of Lords Code of Conduct, 2 July 2001, paragraph 19(e):
"If after the investigation the Sub-Committee finds the allegation
proved, the Member complained against has a right of appeal to
the Committee for Privileges"; the report on procedure paragraphs
32-37 sets out the appeal procedure. Back
The Clerk of the Parliaments' letter to Lord Paul of 23 October
2009 refers only to the repayment of night subsistence. Lord Paul
then volunteered a further payment of £2,535 for the repayment
of travel expenses; the amount calculated by him and confirmed
by the Finance Department. We have no correspondence relating
to this latter payment though the Finance Department assures us
that the full amount has been paid. Back
Report on procedure, paragraph 11 bullet 4. Back
Printed in evidence are the amounts from January 2005, when Lord
Paul first designated a property outside London as his main residence. Back
The House of Lords Finance Department has retained the amounts
claimed each month by members under each head since 2003 but has
retained claim forms only from March 2006; all members' earlier
claim forms have been disposed of in accordance with the department's
disposal policy. Back
The Sunday Times also supplied the Committee with
the recordings on which their transcripts were based. We did not
rely on the newspaper's transcripts but commissioned our own.
Those published as evidence were either corrected or created by
the clerks. Back
Report on procedure, paragraph 25. Back
Report on procedure, paragraphs 26 to 28. Back
Until April 2009, the guide was entitled "Members' reimbursement
allowance scheme general guide". Back
HL Deb 26 July 1979 col 1135-37. Back
Financial Support for Members of the House: Declaration of
Principal Residence and Publication, 3rd Report from the House
Committee, session 2009-10, HL Paper 89. Report agreed to by the
House on 22 March 2010. Back
The conduct of Lord Clarke of Hampstead, 4th Report from
the Committee for Privileges, session 2009-10, HL Paper 112. Back
The Finance Department confirmed his calculation. Back